Open Letter from One Non-Economist to Another

Through your commentary, you provide intellectual cover for a system and structure of power that does not deserve your support. Would you consider that the truth may be vastly different from what you have come to accept as fact? Government’s role in regulating this system of human interactions has grown to enormous proportions. Because of this, we have had a system operating in America for some time now that cannot even remotely be described as free-market capitalism.

The Thieves Keep the Loot

Congress passed a 90% tax on bonuses given by bailed-out companies, and thus does Congress underscore the important principle: when government steals money and decides to hand it out again, the recipient holds a politically conditioned loan that can be taken back at any time. It means that if you are subsidized, you are nationalized in principle.

Ending the Monetary Fiasco — Returning to Sound Money

Mises knew that capitalism, for a number of reasons, has politically powerful enemies. The most powerful, most destructive, and most vicious and subversive of these would be false monetary theory and, as a result, a misguided monetary system, as it inevitably will destroy the free societal order. “It would be a mistake to assume that the modern organization of exchange is bound to continue to exist. It carries within itself the germ of its own destruction; the development of the fiduciary medium must necessarily lead to its breakdown.”

That waterfall

Michael Pollaro says: “A $2.5 trillion deficit will create quite a waterfall on this graph, don’t you think?”

Here is the waterfall-deficit graph (with an attitude). I created it when the projected red ink was “only” $1.6 trillion, after which Obama was to cut it in half by the end of his first term.

 

What Would Mises Say?

Mises is no longer with us to comment on our present debacle, we know which economic principles (truths) he relied on, and it is certainly apropos to raise the question, what would Mises say about the present crisis? His reply would be clear as day. The true cause of the economic instability is what he labeled inflationism. By this he meant the unlimited creation of new money on the part of governments — fiat money without any backing whatsoever.
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